New Delhi, July 19 -- The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the Income Tax Department cannot treat an alleged cash payment made for a property purchase as undisclosed income merely because a taxpayer's name appears in documents seized from a builder during a search.

In a significant ruling in Sanjeet Kumar Kedarnath Gupta v. Income Tax Officer, the Tribunal deleted a Rs.90 lakh addition made under Section 69A of the Income-tax Act after finding that the allegation was based solely on loose papers recovered from a third party.

The taxpayer had jointly purchased a commercial unit from M/s Roshni Enterprises through a registered agreement for Rs.50 lakh. The payments were made through banking channels ...